Premium Earnings 6-18-13 Part 2: FedEx

• Posted by Greg Harmon
• on June 18th, 2013

This idea set was given to subscribers at 12:51 today.

One more name today that reports before the open Wednesday, FedEx, $FDX.

FedEx, $FDX

FedEx, $FDX, is moving in a pennant higher bound by the 50 and 100 day SMA. The Relative Strength Index (RSI) is moving through the mid line higher while the Moving Average Convergence Divergence (MACD) indicator is gently rolling up, giving an short term upside bias in the consolidation. Support lower comes at 98 and 96 followed by 93.25 and 91.50. Resistance higher is found at the round number 100 followed by 102 and 106. The reaction to the last 6 earnings reports has been a move of about 4.18% on average or $4.10 making for an expected range of 95.75 to 104.25. The at-the money June Straddles suggest a similar $4.25 move by Expiry with Implied Volatility at 58% above the July at 29%. Options action is heavy in the June 105/July 110 Call Spread.

Trade Idea 1: Buy the July 105 Call for $1.48.

Trade Idea 2: Buy the July 105/110 Call Spread for $0.88.

Trade Idea 3: Buy the June/July 105 Call Calendar for $1.00.

Trade Idea 4: Buy the June 105 Call for $0.54.

Trade Idea 5: Buy the June 95/July 92.5 Put Diagonal (long June 95 and short July 92.5) for a 36 cent credit.

I like #5 and combining it with #2 or #3 as a next best trade.

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